P-Noy sees economic take off as stocks hit record high

CALAPAN CITY—With local stocks hitting a new record high and finally closing above the psychological 5,000-point level on Friday, President Benigno Aquino III sees this as an indication that the country is indeed poised for an economic takeoff.

“The stock market is the clearest indicator and fastest reacting business indicator to show business confidence,” said the President, who was also in the city for the ceremonial switching on of electricity to 45 sitios (sub-villages) in the area.

The main Philippine Stock Exchange index (PSEi) surged 1.57 percent, or 77.69 points, to close at an all-time high of 5,016.30 Friday.

On Thursday morning, the PSEi rose more than 2 percent to an intraday of 5,011.09 before paring down gains and closing at 4,938.61.

“We’re happy that it has been breached. I hope the day closes that it’s still at 5,000,” Mr. Aquino said.

Cure for sick man of Asia

Speaking to reporters after inaugurating a 2.1-megawatt mini-hydroelectric plant, Mr. Aquino said the PSEi could have breached the 5,000 level much earlier had it not been for the political tension in the Middle East and the financial crisis in Europe.

“There have been many articles written by foreign media sources that say we are about to take off. One article appears to describe me as saying, ‘I may have the antidote, or the cure, for the sick man of Asia,’” he added.

The President noted that the 4,000 index couldn’t be reached before he took office. “We’ve already passed that point and we stayed above 4,000,” he said.

“To tell you the truth, they have been promising to reach 5,000 since last year but the tensions in the Middle East happened, the European crisis happened and it has yet to be solved,” he added.

Local stocks hit an all-time high on Thursday on expectations that the Bangko Sentral ng Pilipinas would cut interest rates to boost the economy.

As expected, the BSP cut its main policy rate by 25 basis points after the market close to a record low of 4 percent to help cushion the domestic economy from the global slowdown.

Bank shares saw strong gains on hopes lower rates would boost demand for loans and spur earnings growth.

Top lender Bank of the Philippine Islands ended Thursday nearly 5 percent higher and second-ranked Metropolitan Bank & Trust Co. rose 3.7 percent.

“The market anticipated another rate cut and we’ve seen a lot of buying into banks,” said Ira Ganhin, an analyst with BPI Asset Management. /inquirer.net